Supreme Court Issues Landmark Biosimilar Ruling

On June 12, 2017, the Supreme Court issued a unanimous ruling in Sandoz Inc. v. Amgen Inc. The case interprets two provisions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) and is expected to significantly impact the approval and patent litigation processes for biosimilar applications. First, the BPCIA requires a biosimilar applicant to notify the reference product sponsor at least 180 days prior to commercial marketing, and the Supreme Court held that an applicant may provide notice prior to approval. Second, the BPCIA provides that a biosimilar applicant shall provide the reference product sponsor with a copy of the biosimilar application, and the Supreme Court held that the BPCIA does not provide injunctive relief to enforce that disclosure provision. Rather, in situations where the biosimilar application is not provided, the sole remedy under the BPCIA is for the reference product sponsor to seek declaratory judgment regarding patent infringement. Also, the Supreme Court remanded the second issue so that the Federal Circuit can consider whether injunctive relief is available under state unfair competition law.

As this blog has reported before, Amgen markets Neupogen (filgrastim), a biologic. Sandoz submitted a biosimilar application for Zarxio (filgrastim-sndz) referencing Neupogen on May 8, 2014. (Zarxio received FDA approval on March 6, 2015.) Although Sandoz notified Amgen that Sandoz had submitted an application and that it intended to market Zarxio immediately upon approval, Sandoz did not provide a copy of the application as described under the patent resolution process, or “patent dance,” in 42 USC 262(l)(2)(A). Previously, the Federal Circuit held that Sandoz did not violate the BPCIA in failing to disclose its application and that the BPCIA provides, as the exclusive remedy for failure to disclose, that the innovator may seek an injunction for artificial infringement under 35 USC 271(e). The Federal Circuit also held that the biosimilar applicant may not provide its mandatory 180-day notice of commercial marketing until after FDA has granted approval of the application.

The Supreme Court reversed the Federal Circuit on the timing of the commercial marketing notice. The Supreme Court held that while notice must be given at least 180 days before marketing, the notice may come either before or after FDA approval of the application. Accordingly, the biosimilar applicant may choose to provide notice while the application is still pending and will not be required to wait 180 days after approval to begin marketing its biosimilar product.

Regarding the application disclosure issue, the Supreme Court agreed with the Federal Circuit that disclosure was not enforceable by injunction under the BPCIA, but for different reasons than those provided by the Federal Circuit. The Court found that disclosing an application was not part of the act of artificial infringement under 35 USC 271(e), and thus failure to disclose the application was not remediable under section 271(e). Instead, the sole remedy under BPCIA for failure to disclose an application is supplied by section 262(l)(9)(C), which authorizes the innovator, but not the applicant, to bring an immediate declaratory-judgment action for infringement regarding any relevant patent. Thus, the innovator gains the control over the scope and timing of the patent litigation that the applicant would otherwise have if it disclosed its application as described in BPCIA. This declaratory-judgment remedy, the Court found, “excludes all other federal remedies, including injunctive relief.”

However, the Court held that the Federal Circuit improperly dismissed the possibility of state law remedies including, in this case, remedies for violation of California’s unfair competition law. The parties framed the issue as whether the disclosure provision under section 262(l)(2)(A) is mandatory, in which case a biosimilar applicant that fails to disclose its application acts unlawfully and violates state unfair competition law. The Court refused to address that issue because it did not present a question of federal law. Rather, the Court directed the Federal Circuit to determine on remand whether noncompliance with the application disclosure provision would be unlawful as a matter of California law, and whether BPCIA preempts any additional state law remedy.

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